IPA response to Government TUPE consultation – April 2013

The IPA has submitted its response to the Government consultation to simplify TUPE 2006 so that transfers are easier for all concerned. This follows the Government’s earlier Call for Evidence (2011) and after many years of lobbying by the IPA. A decision is expected Summer 2013.

15/04/2013

One of the most significant changes proposed by the Government is to remove the Service Provision Changes (SPCs) element of TUPE which is responsible for the automatic transfer of employees from one business to another in certain circumstances. Within the advertising industry, this typically applies when a client transfers work from one agency to another, most often after they have invited a number of agencies to pitch for the piece of business.

The IPA welcomes and supports this proposed change and has made a number of points in its response, including:

TUPE does little to protect employees who can be left in limbo whilst the transferor and transferee businesses decide their fate.

TUPE is overly complex and causes businesses to lose significant management time and costs.

TUPE hinders business development and can lose agencies new business opportunities.

TUPE can cause disruption to both transferor and transferee businesses.

TUPE is often disadvantageous to clients.

There are unhelpful inconsistencies between TUPE and other employment laws.

The UK’s advertising industry is world-renowned, but needs a level playing field in order to compete with agencies in other territories which are not hampered by TUPE.

If SPCs are not removed from TUPE, the Government should find a way of excluding professional services or, at least, creative services, from its ambit.

The Government has indicated that its decisions on the Consultation will be announced this summer, with any changes being implemented towards the end of 2013, albeit with a lead-in period before anything is repealed. The IPA awaits the Government’s response and hopes that it is able to remove SPCs from the scope of TUPE and thereby remove a significant barrier to businesses in the UK.

Says IPA Director General Paul Bainsfair, “We have welcomed the continued dialogue with Government over TUPE and to again formally responding via this Consultation. We are looking forward to the day when this administrative, financial and emotional burden has been lifted. Despite its best intentions, extending TUPE’s reach was never appropriate for the advertising industry as clients need to be able to move their business if they are not happy with their existing relationship. What has happened in the intervening years since 2006 is that there has been an emotional cost paid by people working on a client’s account, who either moved, or not, with the business with no guarantee of continued employment in the longer term. There has also been a hefty financial cost in negotiating the process; a price on doing business. So the proposal to remove the Service Provision Change (SPCs) elements of TUPE are largely welcomed by agencies, their people, and their clients.”